2023 Ohio FHA Guidelines in a Nutshell

An Ohio FHA Mortgage is insured by the Federal Housing Administration (FHA), a federal agency run by the United States Department of Housing and Urban Development (HUD). The FHA Mortgage program’s goal is to promote homewoenrship, thus it is available to all buyers.

Based on client feedback, these are the most pertinent guidelines that Ohio FHA Mortgage seekers need:

Credit Score

HUD sets the minimum credit score requirements for Ohio FHA loans, however the lenders offering the loans can impose stricter guidelines.

• 580 or higher score – Per Ohio FHA Guidelines you qualify for the minimum down payment of 3.5%
• 500-580 – FHA guidelines require a minimum of 10% down payment

In the real world, most lenders offer Ohio FHA financing with a 620 or higher score. Fewer lenders offer Ohio FHA loans with scores between 580 and a 620. Even fewer offer FHA mortgages with scores between 500 and 580. It’s best to call around, or contact me, an Independent Mortgage Broker to get the best advice on your situation.

Ohio FHA Mortgage Down Payment

There are 2 thresholds for Ohio FHA down payments:

• 580 and higher credit score qualifies you for the minimum down payment of 3.5%
• 500 to a 580 credit score requires a down payment of 10%

FHA Credit History

Life happens, and sometimes negative credit events do as well. Ohio FHA loans require specific waiting periods after some major negative credit events, meaning that you cannot apply for an FHA mortgage until the waiting period has passed.

Bankruptcy (Chapter 7 or Chapter 13)

You must wait a minimum of 2 years from the discharge date before you qualify for an Ohio FHA loan.

Foreclosure

Requires a 3 year waiting period from the date the title transferred out of your name before qualifying for an FHA loan.

Late Payments on a Mortgage in the Last 12 months

If you have any of the following, you would not be eligible for an Ohio FHA Mortgage:

• 4 or more 30 day lates, or;
• One or more 60 days lates PLUS one or more 30 day lates, or;
• One or more 90 day late payments

Collections

Ohio FHA Mortgage guidelines allow medical collections to be disregarded.
Non medical collection accounts require that the lender document one of the following:

• Document the debt is paid in full, or;
• Document the borrower has made payment arrangements with the creditor and has made at least one payment under the arrangement, or;
• Include 5% of the balance of the collection in the borrower’s debt to income ratio

Charge-Offs

Ohio FHA loan guidelines allow Charge-Off accounts to be disregarded.

Ohio FHA Mortgage Loan Limits

2023 Ohio FHA Loan Limits will be set in early 2023.
2022 Ohio FHA Loan Limits for a single family residence are $420,680, except for the counties of Delaware, Fairfield, Franklin, Hocking, Licking and Madison, which is $439,300).

Seller Paid Closing Costs

Sellers are able to pay up to 6% of the sales price towards the buyers closing costs for Ohio FHA loans.

Ohio Mortgage Loan Employment History

Ohio FHA requires a 24 month employment history. If you experienced a job gap and only have 18 months of employment since the gap ended, lenders would require that you document 6+ months of employment prior to the gap.

Residency

FHA mortgages are designed for owner occupied (aka primary residence) only. In addition, Ohio FHA only permits a borrower to have one FHA mortgage at a time. However, there are exceptions that allow a borrower to hold more than one Ohio FHA mortgage at a time, which includes:

• Relocation more than 100 miles away from your current residence that has an FHA mortgage.
• Increase in Family Size applies if your current residence no longer meets your family needs (must document an increase in legal dependents) and the Loan-to-Value (LTV) ratio on your current home is 75% or less.
• Vacating a jointly owned residence such as through a divorce.
• Non-Occupying Co-Borrowers are eligible to secure Ohio FHA financing for a primary residence of their own.

Ohio Refinance FHA to FHA

This is known as an Ohio FHA Streamline Refinance. This program has fewer restrictions than a normal refinance, such as no appraisal, minimal income documentation, etc.

To discuss your personal situation and how an Ohio FHA Mortgage may fit your needs Contact Me or fill out the Ohio FHA Mortgage Rate Quote Request